6 Year old default debt - written off?

bamgbost

I have a few defaults from 2022, which have been passed to a debt collector and I have been making token payments for years now.

I am aware that after 6 yrs the defaults drops from my credit file.

However, I have acknowledged the debt exists and have been paying to it so the "statue barred" of 6 years does not apply.

So I guess my Q is, if i do not settle, but keep the debt open for another 2 years to make 6 years. what happens then?

Do i have to keep paying? and if i don't what further damage can they actually do?

Grumpelstiltskin

A default will disappear after 6 years even if you have never paid 1 penny off it, so if you stop paying it now it doesn't make any difference to when it goes.

ManyWays

 if i do not settle, but keep the debt open for another 2 years to make 6 years. what happens then?

The debt drops off your credit record, nothing else changes.
The debt is, as you say, not statute barred. If you stop paying, the lender can go to court for a CCJ which is then on your credit record for another 6 years,

BUT what sorts of debts are these? One thing you can do NOW for any loans, credit cards and HP (not overdrafts. Not utility arrears) is to ask the debt collector to produce the CCA agreement for the debt. If they cannot get that, the debt is unenforceable in court and so you can stop paying with no fear of a CCJ

See

Credit agreements | Getting information | National Debtline

Which explains more about this and has a template you should use.
it is important that you do this NOW as the government is proposing changes to the law that are likely to remove this as an option for you.

bamgbost

ok thanks. I will look into this.

Its an unsecured debt. - Personal Loan and credit card, that went into default 4 years back.

Does the CCA agreement still apply to this?

Grumpelstiltskin

Yes the CCAs still apply, ask for them and don't pay anything whilst you are waiting for answers.

fatbelly

https://forums.moneysavingexpert.com/discussion/6672928/6-year-old-default-debt-written-off

You are correct that there are two separate 6-year rules (in England)

An entry on a credit file drops off completely six years after it is defaulted or settled, whichever happens sooner.

A debt becomes statute barred six years after the 'cause of action' but this time limit is restarted each time you acknowledge the debt by payment or in writing.

Once that 6-year period completes you have a defence to any court claim

bamgbost

If i understand correctly, when the 6 yrs are up and it drops off my file, I am currently still obliged to continue to make payments to clear it all? (unless i stop for 6 further years)?

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82043472#Comment_82043472

Showing on your credit report and being statute barred are two separate things. If it drops off your credit report that doesn't make any difference to anything else and they are still able to get a ccj against you should they wish, just as they were before.

In theory you are obliged to make payments to clear it all, in practice they are likely to accept a reduced settlement offer at some point (they'll have bought the debt for a small fraction of it's value so settling at 50% still gives them a nice profit). It's worth asking for the CCA as if that can't be produced it can' be enforced with a CCJ and you can simply ignore it. It would be worth doing that soon as there are plans to diminish peoples rights regarding debts and that option may not be available in a year or two.

sourcrates

"If i understand correctly, when the 6 yrs are up and it drops off my file, I am currently still obliged to continue to make payments to clear it all?"

Yes, that is correct, your liability for the debt is unaffected by this.

"(unless i stop for 6 further years)?"

Yes, again, for a debt to become statute barred, there must be 6 clear years of non payment or acknowledgement in writing from the debtor.

bamgbost

So given my current position of still paying this debt 4 years into a default, theres no point resetting the clock. May as well continue making my token payments, even though it will take til 2040 to repay at the current rate.

RAS

You might be as well sending a CCA request with a £1 cheque or postal order. If they can't find it, you stop paying and maybe down the line they forget about you or offer a massive discount to settle?